RUSH TRANSCRIPT It felt ░░░░░░░░ today to have so ░░░░░░░░ people on the floor ░░░░░░░░ ll bet it did ░░░░░░░░ Thanks very much despite ░░░░░░░░ excitement on the street ░░░░░░░░ on the floor there ░░░░░░░░ next guest is cautious ░░░░░░░░ thinks both didi and ░░░░░░░░ kreme which is set ░░░░░░░░ price tonight are overvalued ░░░░░░░░ to explain is the ░░░░░░░░ of new constructs an ░░░░░░░░ research firm Let s ░░░░░░░░ a look at didi ░░░░░░░░ David if we might ░░░░░░░░ ll put up the ░░░░░░░░ chart there It opened ░░░░░░░░ at 14 it opened ░░░░░░░░ 16 and has now ░░░░░░░░ back quite a bit ░░░░░░░░ you see it settling ░░░░░░░░ 14 70 or thereabouts ░░░░░░░░ do you think of ░░░░░░░░ stock I think didi ░░░░░░░░ one of the many ░░░░░░░░ ipos coming to market ░░░░░░░░ think the rush to ░░░░░░░░ shares into a very ░░░░░░░░ market is pretty clear ░░░░░░░░ right make hay while ░░░░░░░░ sun shines At 16 ░░░░░░░░ share the valuation implies ░░░░░░░░ will have close to ░░░░░░░░ of the global ride ░░░░░░░░ market that s ridiculous ░░░░░░░░ the amount of competition ░░░░░░░░ there We re not ░░░░░░░░ this business model would ░░░░░░░░ when you re uber ░░░░░░░░ lift but to have ░░░░░░░░ to 50 of the ░░░░░░░░ market share is a ░░░░░░░░ level You just start ░░░░░░░░ the premise and say ░░░░░░░░ is well I was ░░░░░░░░ to use an adjective ░░░░░░░░ a noun but I ░░░░░░░░ t how does uber ░░░░░░░░ lyft s experience inform ░░░░░░░░ view of didi That ░░░░░░░░ a great question Tyler ░░░░░░░░ our perspective on uber ░░░░░░░░ is different these are ░░░░░░░░ unprofitable businesses that we ░░░░░░░░ t think ever will ░░░░░░░░ profitable and they re ░░░░░░░░ in this terrible catch ░░░░░░░░ where if they ever ░░░░░░░░ enough to make a ░░░░░░░░ people won t use ░░░░░░░░ as much Either they ░░░░░░░░ remain unprofitable like we ░░░░░░░░ seeing with didi and ░░░░░░░░ and lyft up to ░░░░░░░░ point Probably you ve ░░░░░░░░ an experience looked at ░░░░░░░░ price of an uber ░░░░░░░░ I will go a ░░░░░░░░ route because it s ░░░░░░░░ too expensive In the ░░░░░░░░ of didi layer on ░░░░░░░░ of that the idea ░░░░░░░░ never really knows do ░░░░░░░░ what Chinese regulators might ░░░░░░░░ how they might infect ░░░░░░░░ cripple the business one ░░░░░░░░ or the other wipe ░░░░░░░░ the management Absolutely Tyler ░░░░░░░░ at alibaba Those are ░░░░░░░░ precedents to being in ░░░░░░░░ Chinese company I would ░░░░░░░░ and run for that ░░░░░░░░ The valuation is way ░░░░░░░░ its skis here The ░░░░░░░░ risk is scary Didi ░░░░░░░░ baba are fun to ░░░░░░░░ just on a silly ░░░░░░░░ to krispy kreme They ░░░░░░░░ great doughnuts They used ░░░░░░░░ have two krispy kremes ░░░░░░░░ topped with vanilla ice ░░░░░░░░ It was heaven after ░░░░░░░░ night of well you ░░░░░░░░ after a night What ░░░░░░░░ you think of krispy ░░░░░░░░ think it will be ░░░░░░░░ tough to compete with ░░░░░░░░ McDonald s dunkin donuts ░░░░░░░░ s giving them credit ░░░░░░░░ being close to four ░░░░░░░░ as profitable as wendy ░░░░░░░░ already And look the ░░░░░░░░ equity guys that are ░░░░░░░░ to sell now have ░░░░░░░░ done a great job ░░░░░░░░ paid around 1 5 ░░░░░░░░ for krispy kreme looking ░░░░░░░░ sell at the midpoint ░░░░░░░░ profits have nose dived ░░░░░░░░ business profit wise looks ░░░░░░░░ lot worse The profits ░░░░░░░░ way worse And so ░░░░░░░░ are the good old ░░░░░░░░ Tyler we could eat ░░░░░░░░ and things like that ░░░░░░░░ preferences have changed these ░░░░░░░░ we think that s ░░░░░░░░ big headwind So this ░░░░░░░░ 6 billion valuation valuation ░░░░░░░░ valuation you think is ░░░░░░░░ overpriced given what the ░░░░░░░░ are What would it ░░░░░░░░ krispy to do in ░░░░░░░░ of profits to justify ░░░░░░░░ valuation They d have ░░░░░░░░ double their profit margin ░░░░░░░░ 4 to 8 And ░░░░░░░░ grow revenue at 13 ░░░░░░░░ annually for the next ░░░░░░░░ which is three times ░░░░░░░░ industry expected growth rate ░░░░░░░░ think it s unlikely ░░░░░░░░ will be able to ░░░░░░░░ outgrow their peers and ░░░░░░░░ their profit margins typically ░░░░░░░░ s either or right ░░░░░░░░ raise prices but it ░░░░░░░░ your market share Or ░░░░░░░░ lower prices and you ░░░░░░░░ for market share doing ░░░░░░░░ is almost impossible but ░░░░░░░░ s what s priced ░░░░░░░░ That s why we ░░░░░░░░ bad